Treasury blames weak accountability for municipal financial mismanagement
National Treasury says poor accountability is driving financial mismanagement in municipalities after withholding R13.5bn from 69 municipalities.
National Treasury says weak accountability is driving ongoing financial mismanagement in municipalities.
The Finance Ministry this week announced it's withholding R13.5 billion in equitable share allocations to 69 municipalities for continuing unauthorised, irregular and wasteful spending.
Seven of the municipalities are in KwaZulu-Natal.
These are iMpendle, Newcastle, eMadlangeni, AbaQulusi Local Municipality, uMzinyathi, Amajuba and uMkhanyakude District Municipality.
Khensani Makaneta, the Director for the Municipal Finance Management Act Regulatory Oversight at the National Treasury, said many municipalities are failing to act against officials responsible for irregular expenditure.
" The AG has said that consequence management in most municipalities is still not happening. So, the process that we undertook is we have engagements with municipalities where we write to them to inform them of the non-compliance, and we tell them of the steps that they must take in order to address the non-compliance. And then we take it based on their responses in terms of their actions and the steps that they are planning to undertake to address the non-compliance"
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National Treasury said it has a support system in place to help municipalities strengthen their financial management and avoid service delivery failures.
" So, there's a myriad of actions that we are taking as National Treasury to support municipalities and those municipalities, for instance, that are struggling, we have a unit called Municipal Recovery Services that assists municipalities with actually developing plans, financial recovery plans, and assisting them to actually collect what is due to them and as far as that recovery plan is concerned.
"But coupled with that, we have been issuing circulars that provide support. Jan spoke about the consequence management framework that we have issued"
She said the intervention is designed to prevent financial crises before they affect communities.
Makeneta added that municipalities receive ongoing support to improve budgeting and financial planning.
" We believe that although we are implementing this step, we are open to actually providing that support and guidance and at particular times to also provide resources to these particular municipalities to assist them to deal with municipal finances and also set them towards the path of recovery"
She encouraged councils to adopt funded budgets and address financial challenges early, while consequence management is implemented where municipalities fail to comply with the law.
" The emphasis is that this should be done at the municipal level, where it is picked up that there is non-compliance."
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